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Employment Law

Employment Rights Act 2025: What Small Businesses Should Prepare For

IP
Indie People
12 June 2025 8 min read

The short answer

The Employment Rights Act 2025 is law, but its measures are being phased in. Employers should update processes for changes already in force while keeping planned 2027 reforms clearly separate from current law.

Changes already in force

  • From 6 April 2026, Statutory Sick Pay starts on the first qualifying day and the lower earnings limit was removed.
  • Paternity leave and ordinary parental leave became day-one rights on 6 April 2026.
  • Holiday and holiday-pay records must be retained for at least six years from 6 April 2026.
  • The maximum collective-redundancy protective award increased to 180 days’ pay.

Important future changes

As at 4 September 2026, ordinary unfair-dismissal eligibility generally still requires two years’ service. ACAS says this will reduce to six months from 1 January 2027. Further zero-hours, flexible-working and other reforms are expected during 2027 and should not be described as current rights before commencement.

What employers should do

  1. Update sickness, parental-leave and holiday-record processes.
  2. Keep a dated implementation tracker based on ACAS and GOV.UK.
  3. Train managers to distinguish current rules from future reforms.
  4. Review dismissal and probation processes before January 2027.

Checked 4 September 2026. Read our current detailed answer and official sources.

#employment law#2025#small business#compliance#workers rights

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